Air Canada has lowered its financial outlook for 2026 after a sharp increase in jet fuel costs put additional pressure on the airline's operating expenses. The revised forecast highlights the growing impact of fuel prices on airline profitability and capacity planning.
In its third-quarter financial results released on October 29, 2026, the Canadian carrier reduced its full-year adjusted earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) forecast to between C$2.4 billion and C$2.7 billion.
The previous outlook had been between C$2.9 billion and C$3.2 billion.
Higher Fuel Costs Weigh on Air Canada
Fuel expenses have become a significant challenge for the airline. Air Canada expects its average jet fuel price to reach approximately C$1.72 per litre in the fourth quarter of 2026, compared with its previous estimate of C$1.29 per litre.
The increase follows a substantial rise in fuel expenses during the third quarter. The airline reported that fuel costs were C$906 million higher than in the same period of 2025.
Jet fuel is one of the largest operating expenses for airlines, making sudden price increases particularly challenging for carriers operating extensive domestic and international networks.
Third-Quarter Financial Performance
Despite the pressure from higher fuel prices, Air Canada reported quarterly revenue of approximately C$6.984 billion.
However, net income attributable to shareholders reached C$139 million, compared with C$264 million in the third quarter of 2025.
The figures illustrate the pressure that rising operating costs can place on airline earnings, even when revenue remains substantial.
Air Canada Adjusts Its 2027 Capacity Plans
The impact of higher fuel prices is also influencing the airline's future planning.
Air Canada has reduced its planned capacity growth for the first quarter of 2027 by more than two percentage points, reflecting the need to adapt its operations to the higher-cost environment.
Capacity adjustments can affect the number of available seats and the frequency of flights on selected routes. However, the financial announcement does not mean that all routes will be reduced or cancelled.
What This Means for Air Travelers
Higher fuel costs can influence airline ticket prices, route planning and the number of flights offered. Airlines may respond through changes in schedules, capacity management or other cost-control measures.
For passengers, the immediate impact will depend on individual routes, market competition and how fuel prices develop in the coming months.
Air Canada's revised outlook is another indication of how energy costs remain a major factor shaping the economics of the global aviation industry.
Official Sources
Financial figures and forecasts are based on Air Canada's third-quarter 2026 results released on October 29, 2026.